The Riskiest Assumption Test (RAT) is a method used by companies or startups to validate the idea for a new product or service before it is brought to market. The RAT is similar to the Minimum Viable Product (MVP) in that it aims to test the viability of a product or idea before investing significant resources in its development.
When to use a RAT: The RAT is used to map the success rate of a new product or idea before the development of the product is started. If the RAT concludes that there is little chance of success for the product or idea, it can be halted immediately, saving valuable time, money, and energy.
What is a RAT: A RAT is designed as a loop: ‘build, measure, learn’. Through this loop, the riskiest assumption of the business or product idea is identified, and it is determined whether this assumption could be a deal breaker for the success of the new product or service. Ways to make this assumption less risky can also be considered.
Identifying Riskiest Assumptions: To start a RAT, the riskiest assumptions must first be identified. This is best done using a Business Model Canvas. Once assumptions are identified, a hypothesis can be formulated.
How to use a RAT: There is no one-size-fits-all approach to using a RAT. However, one example of a successful RAT is the case of Buffer, a social media management platform. Buffer’s riskiest assumption was that people needed such a platform. To test this assumption, Buffer set up an experiment using a landing page with pricing information. The results of this experiment showed that there was indeed a need for such a platform, and Buffer went on to develop its successful platform.
Conclusion: The RAT is a useful method for validating product or business ideas before significant resources are invested. However, it is important to identify the right assumptions as the riskiest, as this can make or break the success of the RAT. Examples of successful RATs include Buffer and Airbnb.